Cummins Reports Plan to Acquire Meritor
Feb 22, 2022 By MarketDepth
Cummins Inc. (NYSE: CMI) and Meritor, Inc. (NYSE: MTOR) have reported entry into a definitive agreement where Cummins will acquire Meritor for USD 36.50 per Meritor share for a total transaction value of USD 3.7 Billion, including debt and net of acquired cash. “The acquisition of Meritor is an important milestone for Cummins. Meritor is an industry leader, and the addition of their complementary strengths will help us address one of the most critical technology challenges of our age: developing economically viable zero-carbon solutions for commercial and industrial applications,” said Tom Linebarger, Chairman and CEO, Cummins. “Climate change is the existential crisis of our time and this acquisition accelerates our ability to address it. Our customers need economically viable decarbonized solutions.”
“In addition, our communities and our planet depend on companies like Cummins to invest in and develop these solutions. This acquisition adds products to our components business that are independent of powertrain technology, and by leveraging our global footprint we expect to accelerate the growth in Meritor’s core axle and brake businesses. There is also a compelling financial case for this acquisition, with significant synergies expected in SG&A, supply chain operations and facilities optimization.”
Tom Linebarger, Chairman and CEO, Cummins
“This agreement with Cummins builds on Meritor’s track record of outstanding performance and service to our customers. Our offerings will continue to play an important, strategic role as commercial vehicles transform to become electric and autonomous,” said Chris Villavarayan, CEO and President of Meritor. “At closing, Meritor shareholders will receive immediate value at a compelling 48% premium to the Meritor trading price as of Feb. 18, 2022, and customers will benefit from enhanced capabilities in technology and the ability to accelerate investment in axle and brake development and EV adoption. Our global team members and their commitment to excellence helped make this transaction possible and will fuel our innovations as we embark on this next chapter in our longstanding legacy.”
